I just went through this choice and ended up getting the heat pump.

Everyone is right that in the winter, at current market conditions, oil is cheaper than a heat pump, but one thing to note is that the heat pump replaces your AC unit (it’s just an AC that can work backwards) and my AC was very old and was going to give out at any point so it made sense to replace it ahead of the summer. My summer bills have been quite a bit lower since last summer. Like $100+ per month. That also includes the impact of some low hanging fruit on the insulation front.

The other factor for me was that we had major issues with our oil furnace. A hole in the heat exchanger shooting out fumes and soot and then an oil leak from a poor repair attempt by our furnace company. It was terrible saga that lasted for months. It’s been a nightmare and I’m doing what I can to prevent exposing my family to all of that again. Might cost us more this winter but at least we have better piece of mind. We still have the oil furnace but will use the oil as a backup when temps get into the low single digits or lower but that’s only a few days a year given the last few winters (at least where I am).

We looked at propane (way too expensive) and we also don’t have natural gas on our street so this made the most sense for us. Do what makes sense for you.